Saturday, October 20, 2012

Obama’s Auto Bailout Was Really a Hefty Union Payoff

The Fiscal Times via Free Republic

In the second presidential debate, Mr. Obama attacked early on, saying, “Governor Romney said we should let Detroit go bankrupt.”

Note to Obama fans: GM did go bankrupt – filing for Chapter 11 protection against its creditors on June 1, 2009. It’s what happened next that the president can take credit for – a handout of $49.5 billion in taxpayer money to GM, some $27 billion of which remains outstanding, and another $17 billion to its financial arm Ally Financial, which still owes $14.7 billion.
The Obama administration strong-armed the auto companies’ creditors into accepting undeniably unfair terms – terms that saw pensions obliterated for non-union workers but saved for those carrying a UAW card. Terms that saw non-UAW shops close but UAW factories stay open. Terms that doled out ownership in GM with political favoritism as a guiding principle.
In a growing scandal, Obama’s former auto czar and two Treasury officials appear implicated in the decision to eliminate the pensions of 20,000 non-union workers at GM’s Delphi unit, while protecting benefits for UAW members. Under oath, they blamed the decision to wipe out the nonunion pensions on the Pension Benefit Guaranty Corporation, but emails uncovered earlier this year show that Treasury held meetings on the matter in which the PBGC was not included.
There's a large per car manufacturing cost disadvantage for GM and even this deal didn't fix that.  Therefore, GM isn't completely on the mend as Obama claims.

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